Uganda’s business leaders and industry stakeholders are raising alarms over the growing threat of illicit trade, warning that it not only undermines legitimate businesses but also endangers public health and safety.
Counterfeit goods, tax-evading imports, and substandard locally produced products are on the rise, eroding the country’s economic integrity and posing serious challenges to consumer protection.
Dr. Julius Byaruhanga, Director of Policy and Business Development at the Private Sector Foundation Uganda (PSFU), says the proliferation of illicit trade is significantly affecting competitiveness in the formal economy.
“We have seen significant growth in illicit trade, including counterfeit goods, tax-evading imports, and substandard products. This poses a serious challenge to competitiveness,” he noted.
He explains that when traders sidestep tax obligations, their products become artificially cheaper, unfairly outcompeting legitimate, tax-compliant businesses.
“If someone is not paying taxes on their products, their prices will obviously be lower, leading consumers to choose those products over compliant ones,” Dr. Byaruhanga said.
The alcohol sector, in particular, is facing a serious public health concern due to unregulated production and distribution.
Emmanuel Njuki, Chairman of the Uganda Alcohol Industry Association (UAIA), revealed a worrying trend: “Out of every 10 Ugandans who go out for a drink, 7 are likely consuming something unregulated, unlicensed, and potentially harmful to their health.”
The consumption of unsafe alcohol—often brewed or packaged under unsanitary conditions and lacking quality assurance—has been linked to severe health issues and fatalities.
Njuki emphasised that clear boundaries must be set around alcohol production, distribution, and consumption, especially for vulnerable populations.
“Anyone under the age of 18, pregnant or breastfeeding mothers, and individuals undergoing treatment should not consume alcohol,” he stressed.
“Therefore, alcohol should only be sold to those legally allowed and who have made a personal choice to drink.”
While some illicit products are imported, many are produced locally, which necessitates a coordinated internal crackdown.
“Much of the illicit products are produced locally, so there must be a deliberate effort to trace and track these products, especially in the alcohol and tobacco sectors,” Dr. Byaruhanga urged.
As part of its self-regulatory approach, the UAIA is calling on industry players to adopt ethical practices.
“We invite as many members as possible as we self-regulate the way we produce our products, market them, and set clear boundaries around their consumption,” Njuki said.
The calls come amid ongoing discussions about the need for a more robust policy and enforcement framework to tackle Uganda’s growing illicit trade.
Stakeholders are advocating for stronger inter-agency collaboration, better consumer awareness, and stricter penalties for those engaging in illegal trade practices.
As the country continues to grapple with economic pressures, the importance of protecting consumers and promoting fair competition in the market has never been more urgent.
The path forward, experts agree, lies in stronger regulation, public-private collaboration, and increased accountability at all levels.